What do you want to do when you retire? Whether you have big adventures planned or you’re looking to embrace the peace and quiet of retirement, better tomorrows start today with an Individual Retirement Account (IRA).
Compass Credit Union offers a Roth IRA, a Traditional IRA and a Coverdell Education Savings Account.
For more information, or to get started, email Julie Tombolillo at [email protected]
Types of IRAs
Roth IRA
A Roth IRA is a type of retirement account where contributions are made through tax-free withdrawals from your paycheck. Roth IRA funding is done through after-tax dollars; this means that Roth IRA contributions are not tax deductible. One advantage of a Roth IRA is that money is tax-free when you’re withdrawing money from your IRA. In brief, when you put money in to your Roth IRA, you pay taxes on these retirement contributions; however, once you need the money from your Roth IRA, you can access this money without having to pay taxes.
A Roth IRA is best for people whose taxes will be higher in retirement than what they pay in taxes now when putting in money to their Roth IRA.
Roth IRAs are only available to people who fall within a certain income limit. People who file their taxes individually must make less than $140,000 in a year. People who file taxes jointly as a married couple must make less than $208,000 total in year. Income limits increase yearly and are adjusted for inflation.
To Open a Roth IRA at Compass Credit Union…
Traditional IRA
While you pay taxes on retirement contributions but can access your retirement funds tax free with a Roth IRA, the opposite is true for a Traditional IRA. With a Traditional IRA, you add money to your retirement account without paying taxes on retirement contributions; however, once you withdraw money from a Traditional IRA, you pay taxes on the money you access. When you put money in to a Traditional IRA, these retirement contributions may be tax deductible.
Traditional IRAs do have limits on how much you can contribute to this retirement account in a year. People who are younger than 50 years old can contribute up to $6,000 in a year to their Traditional IRA; people ages 50 or older can contribute up to $7,000 in a year. The above Traditional IRA contribution limits are current for 2020; contribution limits may be adjusted for inflation in the future.
To Open a Traditional IRA at Compass Credit Union…
Better Tomorrows Start Today with an IRA
Start saving for your retirement with Compass Credit Union. We can help you navigate whether a Roth IRA or Traditional IRA is best for you.
The sooner you start saving for retirement, the better off you could be.
